Budget 2014: Great step in steering the economy over coming years, says KV Kamath, ICICI Bank

The Budget has addressed the existing issues in the sector, in terms of access to fuel and so on; and articulated a vision for the future of the sector and its role in the economy.

By KV Kamath

The Union Budget presented on Thursday has two distinguishing features. Firstly, it comprehensively touches almost every area of economic activity and every issue facing the country's economy today. It ticks all the boxes and lays out the broad direction and, in many cases, specific policy measures.

Secondly, it indicates a willingness to listen and a responsiveness to the views and concerns of market participants. This Budget is grounded in the aspiration of the people of India for higher growth, more opportunity and a better life. It reiterates the resolve to take the country back to growth rates of 7-8 per cent or higher.

It announces a range of initiatives on agriculture, manufacturing, services and infrastructure, aimed at spurring growth and enabling entrepreneurship, economic activity and job creation. In the case of infrastructure, the intent has been clearly explained with respect to all segments of the sector.

The Budget has addressed the existing issues in the sector, in terms of access to fuel and so on; and articulated a vision for the future of the sector and its role in the economy.

The special focus on areas like tourism, use of technology and connectivity as an economic lever, creation of new urban centres and the "rurban" approach to the rural economy indicate a fresh way of thinking about realising the country's vast potential.

At the same time, the Budget has not lost sight of the current reality and constraints that we face, and has taken steps to address these. The articulation of a path of fiscal prudence and the commitment to contain inflation and the current account deficit, should address concerns about the stability and sustainability of the Indian economy as we begin to resume growth.

The direct tax slabs and rates have been broadly retained, with some easing in the form of higher exemptions and deductions. The government's focus on maintaining investor confidence is clear from its commitment to a stable tax regime, the measures announced to ease concerns around transfer pricing issues and the measures to improve tax administration.

The Budget has sought to enhance certainty of the environment in which business is to be conducted in India. In summary, I would say that the Budget is a great first step in steering the economy over the coming years, in a manner that leverages our potential, enhances our vibrancy and achieves our aspirations.